KAMCO Research. State of Kuwait: Economic & Financial Facts. 19 Sept-2013

Transcription

1 State of Kuwait: Economic & Financial Facts 19 Sept-2013 Kuwait s nominal GDP is estimated to have recorded at KWD 51.3 billion (USD bn) in 2012 and is forecasted to further grow to KWD 52 billion (USD 182 bn) in 2013 underpinned by high oil prices and output level at 2.92 million b/day along with favourable business environment. GDP is expected to continue posting healthy growth rates in the medium-to-long term ( ) with forecasted average annual growth rate in real GDP of 3.7%. The provisional estimates of Kuwait s National Accounts for 2012 published by the Central Statistical Bureau indicate that Kuwait s nominal GDP grew at 15.7% in 2012 to record an all-time high of KWD 51.3 billion (USD billion). The robust growth was fuelled by high oil prices that averaged above USD 100/barrel during the year along with healthy growth in the non-hydrocarbon sector underpinned by positive business environment and the gradual recovery in the private sector. Oil GDP grew at 19.4% to KWD 32.1 billion accounting for 63% of 2012 GDP, while Non-oil GDP also witnessed a healthy growth of 10% to a record high of KWD 19.2 billion (USD 67 billion). Despite the healthy growth in the non-hydrocarbon sector, which contributed 37% to the Kuwaiti economy, the Hydrocarbon sector remains the key contributor to economic growth with a 63% share of the GDP in Moreover, oil revenues continue to represent the bulk of government revenues at 94% of total revenues for the fiscal year 2012/13. Historically, the hydrocarbon sector has made up the largest component of Kuwait s GDP, averaging at 56% over the period from The Public Sector (Hydrocarbons and Community Services) has dominated the Kuwaiti Economy with an average share of 69% of Nominal GDP over the period , while the Private Sector accounted for the remaining 31%. The government s fiscal policy of spending on community services and salaries along with high oil revenues were the key growth drivers for the economy. Per-capita GDP figures for 2012 increased to KWD 13,413 (USD 46,946) up from KWD 12,203 (USD 43,321), among the highest in the region and the world. However, sustaining such figures require diversifying away from the hydrocarbon sector and enhancing the performance and contribution of the non-hydrocarbon sector, represented by the private sector and its key segments (industrial, financial, real estate and construction, transportation, and trade). Kuwait s Public finances are heavily dependent on oil revenues, making up 94% of total revenues for the fiscal year 2012/13 recording at KWD billion (USD billion) up from KWD billion (USD 100 billion) for fiscal year 2011/12, representing an annual growth rate of 4.9%. This exposes the government s spending on productive sectors to the risk of volatile oil prices. Oil Revenue had been volatile over the last 8 fiscal years driven by the imbalance in the oil market along with global economic sentiments. As an oil-based economy, hydrocarbon revenues accounted for around 94% of government revenues over the last 8 fiscal years (2005/06 to 2012/13) and amounted to around KWD billion (USD billion) while non-hydrocarbon revenues aggregated KWD 10.7 billion (USD 37.3 billion) representing just 6% of revenues. Diversification to increase non-hydrocarbon revenues is essential and should be the country s focus in the medium to long-term by reconsidering the tax system and attracting foreign capital to the country. The imbalance in the government s fiscal policy is a result of the extreme reliance on oil revenues (94% of gov t revenues) along with the massive spending on salaries and subsidies that accounted for around 89% and 56% of total expenditure and revenues, respectively, over the last 8 fiscal years. Capital spending on productive economic sectors and projects and improving the country s infrastructure that averaged around KWD 1.4 bn per year in the last 8 fiscal years is not adequate to develop the economy and sustain economic growth in the long run. 1

2 Kuwait Nominal GDP KAMCO Research State of Kuwait: Economic & Financial Facts Figures in KWD Million Nominal GDP 23,593 29,470 32,581 39,620 30,496 34,369 44,323 51,290 Oil GDP 12,233 16,478 17,048 23,508 14,992 18,407 26,896 32,120 Y-O-Y Growth % 56.4% 34.7% 3.5% 37.9% (36.2%) 22.8% 46.1% 19.4% % of GDP 51.8% 55.9% 52.3% 59.3% 49.2% 53.6% 60.7% 62.6% Non-Oil GDP 11,360 12,991 15,533 16,112 15,504 15,963 17,427 19,170 Y-O-Y Growth % 17.2% 14.4% 19.6% 3.7% (3.8%) 3.0% 9.2% 10.0% % of GDP 48% 44% 48% 41% 51% 46% 39% 37% Inflation Rate 4.11% 3.03% 5.53% 10.57% 3.98% 3.97% 4.73% 4.30% % Kuwait Nominal GDP (KWD bn) 40.0% 29.0% Y-O-Y Growth % 24.9% % 20.0% % 12.7% % 10.0% % % % % -30.0% Kuwait Nominal GDP (KWD bn) Oil GDP (KWD bn) Non-Oil GDP (KWD bn) Source: Annual Statistical Abstract 2010, CSB, CBK, & KAMCO Research

3 Population & Per Capita GDP 000 Inhabitants Total Population 2,991 3,183 3,400 3,442 3,485 3,582 3,697 3,784 Y-O-Y Growth % 8.6% 6.4% 6.8% 1.2% 1.3% 2.8% 3.2% 2.4% Kuwaiti 992 1,023 1,055 1,088 1,119 1,148 1,183 1,204 Y-O-Y % Growth 3.8% 3.1% 3.1% 3.1% 2.9% 2.6% 3.0% 1.8% % of Total Population 33% 32% 31% 32% 32% 32% 32% 32% Non-Kuwaiti 1,999 2,160 2,345 2,354 2,366 2,434 2,514 2,580 Y-O-Y % Growth 11.2% 8.0% 8.6% 0.4% 0.5% 2.9% 3.3% 2.6% % of Total Population 67% 68% 69% 68% 68% 68% 68% 68% Per Capita GDP (KWD) 7,888 9,259 9,584 11,511 8,751 9,595 12,203 13,413 Per Capita GDP (USD) 28,237 33,146 34,309 41,211 31,329 34,349 43,321 46,946 Source: Annual Statistical Abstract 2010, CSB, CBK & KAMCO Research Kuwait Public Finance Figures in KWD Million 2005/ / / / / / / /13 Oil Revenues 12,955 14,511 17,719 19,878 16,848 19,947 28,570 29,970 % of Total Revenues 94% 94% 93% 94% 94% 93% 94% 94% Non-oil Revenues ,303 1,254 1,077 1,555 1,667 2,039 % of Total Revenues 5.6% 6.4% 6.9% 5.9% 6.0% 7.2% 5.5% 6.4% Total Revenues 13,728 15,509 19,023 21,133 17,925 21,502 30,236 32,009 Y-O-Y Growth 13.0% 22.7% 11.1% -15.2% 20.0% 40.6% 5.9% Capital Expenditures 809 1,067 1,296 1,480 1,163 1,841 1,799 1,810 % of Total Expenditures 11.8% 10.3% 13.4% 8.1% 11.9% 11.3% 10.6% 9.4% Current Expenditures 6,053 9,240 8,402 16,782 8,584 14,380 15,209 17,497 % of Total Expenditures 88.2% 89.7% 86.6% 91.9% 88.1% 88.7% 89.4% 90.6% Total Expenditures 6,862 10,306 9,698 18,262 9,747 16,221 17,007 19,308 Y-O-Y Growth 50.2% -5.9% 88.3% -46.6% 66.4% 4.8% 13.5% Primary Surplus/Deficit 6,866 5,203 9,325 2,871 8,178 5,281 13,229 12,701 % of Total Revenues 50.0% 33.5% 49.0% 13.6% 45.6% 24.6% 43.8% 39.7% Transfers to RFFG 1,373 1,551 1,902 2,113 1,793 2,150 3,024 8,002 % of Total Revenues 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 25.0% Final Surplus/Deficit 5,493 3,652 7, ,386 3,131 10,205 4,699 % of GDP 23.3% 12.4% 22.8% 1.9% 20.9% 9.1% 23.0% 9.2%

4 Kuwait Nominal GDP By Economic Activity Figures in KWD Million YR CAGR Oil & Gas 16,518 17,094 23,554 14,992 18,407 26,896 32, % Community Services 3,576 4,090 4,742 5,092 5,584 6,473 7, % Financial Services 3,272 4,698 4,407 3,471 3,092 2,958 3, % Transport, Storage & Comm. 1,614 1,803 1,753 1,562 1,933 2,261 2, % Manufacturing 1,937 2,395 2,623 2,741 2,406 2,309 2, % Wholesale & Retail Trade 1,263 1,371 1,406 1,413 1,546 1,606 1, % Real Estate 1,240 1,277 1,268 1,210 1,156 1,266 1, % Construction % Electricity & Water % Business Services % Agriculture & Fishing % Mining % Nominal GDP at PP 30,663 34,108 41,230 32,022 35,922 45,861 53, % Source: Annual Statistical Abstract 2010, CSB, CBK & KAMCO Research Average Contribution of Sectors to Kuwait Nomianl GDP ( ) Manufacturing, 6.4% Wholesale & Retail Trade, 3.9% Real Estate, 5.0% Others, 2.4% Transport, Storage & Comm., 5.0% Financial Services, 9.6% Oil & Gas, 54.2% Community Services, 13.5% Source: Annual Statistical Abstract 2010, CSB, CBK, & KAMCO Research

5 Kuwait Economic & Financial Facts Disclaimer This document and material contained herewith have been produced, complied, and issued by KIPCO Asset Management Company KSC Closed (KAMCO). The Company has obtained the information used in this document from sources it believes to be reliable, but the issuer does not guarantee, neither its accuracy nor completeness, nor provides an independent verification of the material contained therein. KAMCO may, from time to time to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities, perform services for or solicit business from such issuer and/or have a position or effect transactions in the securities or options thereof. KAMCO may, to extent permitted by the applicable Kuwaiti law or other applicable laws and regulations, effect transactions in the securities before this material is published to recipients. The opinions and estimates expressed herein are those of the issuer and subject to change at any time without any prior notice. Accordingly, no representation or warranty, expressed or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. KAMCO accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document should not relied upon or used in substitution for the exercise of sound judgment. KAMCO shall have no responsibility or liability whatsoever in respect of any inaccuracy in or omission from this or any other document prepared by KAMCO for, or sent by KAMCO to any entity, and any such entity shall be responsible for conducting its own scrutiny, investigation, and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute KAMCO s judgment and are subject to change without prior notice. Past performance is not an indicator of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. This document is not an offer to sell or a solicitation to buy any securities. It is being furnished to the reader solely for his/her information and may not to be redistributed inside Kuwait or by any jurisdiction outside Kuwait where this action is restricted by law. Entities who receive this report should make themselves aware of and adhere to any such restrictions. By accepting receipt of this report, the reader agrees to be bound by the foregoing limitations. KIPCO Asset Management Company KSC (Closed) 2013